Correlation Between BJs Restaurants and GobiMin

Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and GobiMin at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BJs Restaurants and GobiMin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BJs Restaurants and GobiMin, you can compare the effects of market volatilities on BJs Restaurants and GobiMin and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BJs Restaurants with a short position of GobiMin. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and GobiMin.

Diversification Opportunities for BJs Restaurants and GobiMin

-0.14

Correlation Coefficient

BJs Restaurants  GobiMin

Good diversification

The 3 months correlation between BJs and GobiMin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and GobiMin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GobiMin and BJs Restaurants is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BJs Restaurants are associated (or correlated) with GobiMin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GobiMin has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and GobiMin go up and down completely randomly.

Pair Corralation between BJs Restaurants and GobiMin

If you would invest  127.00  in GobiMin on October 23, 2024 and sell it today you would earn a total of  0.00  from holding GobiMin or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

BJs Restaurants  vs.  GobiMin

BJs Restaurants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BJs Restaurants has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BJs Restaurants is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

GobiMin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GobiMin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GobiMin is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BJs Restaurants and GobiMin

The main advantage of trading using opposite BJs Restaurants and GobiMin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, GobiMin can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GobiMin will offset losses from the drop in GobiMin's long position.

The idea behind BJs Restaurants and GobiMin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.